To our shareholders

We offer our deepest sympathies to the victims of the Great East Japan Earthquake that occurred on March 11, 2011.

For the first half of the consolidated fiscal year ending March 31, 2012, the Sun Frontier Fudousan Group had sales of ¥3,349 million, operating income of ¥317 million and ordinary income of ¥285 million. Net income was ¥254 million. Further, in light of recent performance trends, we have upwardly revised the full year earnings forecast that was announced on August 10. For details of the revision, please refer to the "Difference with Consolidated Earnings Forecast for the Second Quarter of the Fiscal Year ending March 31, 2012 & Notification Regarding Revised Full Year Earnings Forecast," which was announced today, November 10, 2011.

During the second quarter in the real estate service business, we have placed our efforts in generating business opportunities through incorporating sales, construction, and revitalization needs derived from transactions in leasing brokerage while increasing the amount of assets under contract in the property management business in order to expand the business stably over the long term. On the other hand, in the real estate revitalization business, we focused on acquisition/sales activities in the market for mid- to small-size properties of several hundred million yen worth with high liquidity. Also, in order to restore the dividend to shareholders in a timely manner, we made up for loss carried forward from previous fiscal years by conducting an appropriation of retained earnings and reduction in the amount of capital stock and capital surplus on June 30, 2011. All employees of the company will work together to bring about the announcement of a resumption of dividends to our shareholders as soon as possible by further improving business performance while steadily improving the business in the future.

Going forward, office and commercial buildings in central Tokyo will be our target as we continue to develop our main target from middle to lower market business in real estate businesses, including property management, sales brokerage, and leasing brokerage. We consider property management and leasing brokerage business sectors as the areas that will directly increase the satisfaction of building owners through our professional “building management”. In addition to our strength of having over 700 transactions each year and ability to secure modest rentals through community-based sales, we provide a valuable additive service to building owners by increasing the "building's general management strength" by utilizing various internal functions related to building management like building planning, building renovation, tax, and legal services.

As another point, we consider our real estate revitalization and sales brokerage business sectors to be a type of “real estate utilization” business that can increase the value of building owners’ real estate assets as a whole and multifaceted. In sales brokerage business, along with increasing our ability to provide solutions to problems in real estate, we have placed our efforts in developing foreign investors with Asia. Further, for our real estate revitalization business, we will develop it centered on a shortened business cycle which suppresses market volatility risk in small sized real estate revitalization through self-investments while making efforts to mitigate investment risks in mid-sized projects that exceed ¥1 billion through joint investments. We have a plan to develop a fee business that utilizes our know-how and experience that we have cultivated.

We will work to offer services that give a high-level of satisfaction to our customers by resolving our clients’ asset related troubles as building management and real estate professionals. We look forward to continuing to receive your unwavering support and encouragement in the future.

November 10, 2011
Tomoaki Horiguchi, President & Chief Executive Officer